Correlation Between Display Tech and Handok Clean
Can any of the company-specific risk be diversified away by investing in both Display Tech and Handok Clean at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Display Tech and Handok Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Display Tech Co and Handok Clean Tech, you can compare the effects of market volatilities on Display Tech and Handok Clean and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Display Tech with a short position of Handok Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Display Tech and Handok Clean.
Diversification Opportunities for Display Tech and Handok Clean
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Display and Handok is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Display Tech Co and Handok Clean Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Handok Clean Tech and Display Tech is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Display Tech Co are associated (or correlated) with Handok Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Handok Clean Tech has no effect on the direction of Display Tech i.e., Display Tech and Handok Clean go up and down completely randomly.
Pair Corralation between Display Tech and Handok Clean
Assuming the 90 days trading horizon Display Tech Co is expected to generate 2.22 times more return on investment than Handok Clean. However, Display Tech is 2.22 times more volatile than Handok Clean Tech. It trades about -0.17 of its potential returns per unit of risk. Handok Clean Tech is currently generating about -0.43 per unit of risk. If you would invest 311,000 in Display Tech Co on September 12, 2024 and sell it today you would lose (36,500) from holding Display Tech Co or give up 11.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Display Tech Co vs. Handok Clean Tech
Performance |
| Timeline |
| Display Tech |
| Handok Clean Tech |
Display Tech and Handok Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Display Tech and Handok Clean
The main advantage of trading using opposite Display Tech and Handok Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Display Tech position performs unexpectedly, Handok Clean can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Handok Clean will offset losses from the drop in Handok Clean's long position.| Display Tech vs. Samsung Electronics Co | Display Tech vs. Samsung Electronics Co | Display Tech vs. SK Hynix | Display Tech vs. POSCO Holdings |
| Handok Clean vs. Vitzro Tech Co | Handok Clean vs. Shinsung Delta Tech | Handok Clean vs. Orbitech Co | Handok Clean vs. Korea Information Engineering |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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